Hindustan Construction Company Ltd Q1 FY27 Earnings Analysis

- The company targets a growth of around 20% in turnover for the current year. - Expected substantial revenue ramp-up from FY27 onwards, driven by increased order bookings. - Order intake target for FY26 is ₹15,000 crore, aiming to grow order backlog to ₹26,000-27,000 crore by FY27. - Healthy growth in top line and even better growth in bottom line expected starting FY27. - Anticipate 14-15% EBITDA margins to be maintained long-term with stable operating cash flows (~₹700 crore). - Sectors like nuclear, hydro, transport, buildings, and industrial (steel, copper, aluminium) show significant growth opportunities. - Nuclear order book expected to increase from current low level (3-8%) due to scaling up programs and private/government developer traction. - Execution efficiencies and deleveraging will boost profitability and margins going forward. - The company is focused on disciplined risk management and profitable growth instead of volume-only increases.

- Expect healthy growth from FY27 onwards in both top line (revenue) and bottom line (profits). - PAT (Profit After Tax) growth and PAT margins anticipated to improve substantially with operational efficiencies and deleveraging. - EBITDA margins to be maintained around 14-15% on average. - Operating cash flows projected to be around ₹700 crore or more, though may be lumpy quarter to quarter. - Further debt prepayment planned in FY27 leading to substantial EPS accretion. - The company aims to become debt-free in near to medium term (around FY28), which will positively impact profitability. - Business growth expected due to increase in order bookings targeting ₹15,000 crore in FY26 and a backlog of around ₹26,000-27,000 crore by FY27. - Opportunities across sectors like nuclear, hydropower, metro, and industrial expected to drive growth.

- The company is taking enabling approval for a fresh issue of up to ₹800 crore to support fast growth and capital needs, though the timing and mode (likely rights issue) are not yet finalized (Page 10-11). - They aim to book ₹15,000 crore in orders in FY27, targeting an order book of ₹22,000-25,000 crore by FY27 end with a long-term CAGR of 20-25% in order backlog and revenue (Page 10). - Planned capital investments are aligned with the infrastructure sector expansion in metro, hydropower, nuclear, and industrial sectors, with opportunities in projects worth tens of thousands of crores (Pages 2-4). - Strategic focus on deleveraging the company completely to free up room for growth capital; exploring refinancing to reduce finance cost and improve liquidity (Pages 9-11). - Investment in subsidiary HCC Infrastructure (~₹1,150 crore) is maintained due to receivables recovery expectations and business prospects (Page 5).

- The company has taken an enabling approval for a fresh fundraise of up to ₹800 crore. - No immediate decision to raise funds; the need will be assessed based on capital requirements for growth and order opportunities (Page 10). - If equity is raised, it is likely to be through a rights issue to benefit existing shareholders (Page 10). - The possibility of a rights issue is not a done deal but serves as an enabling provision due to expected large orders, including potential BOT opportunities (Page 12). - The company aims to avoid equity raises if possible, as equity is the most expensive capital (Page 12). - On the debt side, the company has been actively deleveraging and aims to be debt-free in the short to medium term (Pages 8, 9). - Refinancing options are being considered to reduce cost of debt and improve liquidity (Page 10).

- Current order backlog as of 31 March 2026 includes ₹26,000 crore of bids under evaluation. - Additional bids of around ₹43,800 crore planned to be submitted in Q1 and Q2 FY27. - The company's order book sectors include transport (maximum), followed by hydropower, water, nuclear, and buildings. - Nuclear orders currently constitute about 3% of the order book but are expected to increase significantly in the next five years due to multiplying opportunities. - Expected order book by FY27 is around ₹26,000-27,000 crore. - Long-term target aims for 20-25% CAGR in order backlog and revenue growth. - There is anticipation of scaling to ₹40,000-50,000 crore order book by FY28 in a favorable scenario. - One significant L1 position is ₹840 crore related to a Kashmir project pending administrative clearance.